With the launch of the A45 AMG and the upcoming reveal of the CLA45 AMG, Mercedes-Benz AMG is charging hard into the compact-performance segment. Back home in Germany, the AMG pair meet two established competitors: the outgoing Audi RS3 Sportback, producing 340 horsepower from a turbocharged 2.5-liter straight-five, and the BMW M135i, with a turbocharged 315-horsepower straight-six. AMG’s addition of its 355-hp, turbocharged 2.0-liter four-cylinder gives Benz the distinction of the hottest compact motor of the three major players in the land of Hasselhoff.

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At 121 cubic inches of displacement, AMG’s M133 engine produces a lofty 178 horsepower per liter, which Mercedes says is the highest of any four-cylinder automotive engine ever produced in significant volume. This long-stroke powerplant is derived directly from the ubiquitous M270/M274 mill that powers several A-, B-, C-, and E-classes. And like those, this powerplant has been engineered with spray-guided direct injection, which uses piezo injectors.

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The M133 also receives forged pistons and a forged crankshaft optimized for low rotating inertia and low friction. The cylinder walls are coated with twin-wire arc spray, a technology that was developed by Mercedes-Benz AMG and first used in the M156 6.2-liter V-8, and is known as Nanoslide. Maximum power comes at 6000 rpm, and the powerplant redlines at 6700 rpm; maximum torque, 332 lb-ft, is provided from 2250 to 5000 rpm.

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The A45 AMG is force-fed by a BorgWarner-supplied twin-scroll turbocharger that delivers 26 psi (1.8 bar) of boost. An air-to-water intercooler reduces the intake temperature. A seven-speed, wet dual-clutch automatic is standard; it is derived from the Benz’s standard dual-clutch transmission and optimised for higher torque. The engine’s cooling system is enhanced with an additional cooler, and regulating transmission-fluid temperature is integrated in with the engine cooling system.

For ultimate sound, AMG is fitting an exhaust system with a computer-controlled diverter flap; it provides additional acoustic feedback when the transmission’s Sport or Manual mode is selected—the throttle is blipped automatically under downshifts when in these modes, too. The effect is amplified with the optional performance exhaust system. The transmission’s Comfort setting will provide smoother and quieter shifting action, as well as activate the M133’s start-stop function, which is partially responsible for the engine’s excellent 34-mpg rating in the, ahem, optimistic European cycle.

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Unlike the V-8 and V-12 engines by AMG, the M133 is not built at AMG headquarters in Affalterbach. Instead, it will be manufactured in Mercedes’ Kölleda, Germany, engine plant some 200 miles north. But AMG is installing a separate production line, and the “one man, one engine” philosophy remains.